Do you want that freelancer you hired online to suddenly be able to claim ownership over your business’s intellectual property?
If you’re like most business owners, the answer to that is a hard no.
To grow your creative business without burnout, you must grow your team. And growing your team means bringing on expert freelancers and independent contractors. When you do this, you fast-track your business growth while staying focused on the creative work that you do best.
However, you must avoid certain legal pitfalls. Otherwise, the whole thing becomes a money pit and a headache.
As lawyers for creatives, we’ve seen creative businesses thrive when they bring in the right people. And they all know how to avoid the pitfalls that can snare the unwitting. And you can, too.
Here are 7 pitfalls to avoid when hiring freelancers and independent contractors.
Unaligned vision
Working with anyone requires an aligned vision.
When working with freelancers, ensure that everyone has clarity on what a valuable outcome looks like. That means not just focusing on the work to be done but also on how that work will contribute to the goals of the business and customers. This context makes it much easier to know if the partnership helps you grow.
Working without an aligned vision creates a toxic brew of misunderstanding.
Unclear intellectual property ownership
Creative businesses thrive when they own and leverage intellectual property, so it’s crucial to be clear on ownership.
By default, when you hire a freelancer to create something for you, they usually own the copyright. Make sure you’re clear on if and when that changes. You can do this using a contract that details what you own and what remains the property of the independent contractor.
Failing to get this right could mean expensive copyright and trademark disputes.
The AI trap
You must know if your freelancer or contractor uses AI to create something.
It’s vital to ensure your freelancers and contractors disclose when they use AI to create something because work created by AI often cannot be copyrighted. As a business owner, you don’t want creative assets that copyright cannot protect. So, your freelancers must tell you when they use AI.
You can decide whether or not that matters, but you must know to make an informed decision.
Making an accidental employee
When hiring freelancers, you do not want to run afoul of your state’s employment law.
Freelancers and contractors must work independently, or they risk accidentally becoming employees, which means the person hiring them can quickly run afoul of employment law. The rules vary from state to state, but generally speaking, the law requires freelancers and independent contractors to use their own tools and facilities and control their time.
We strongly recommend consulting with a lawyer in your state to learn the specifics, as employment litigation and penalties are extremely expensive.
Breach of confidentiality
Hiring freelancers requires a lot of trust.
You’ll be sharing some sensitive internal information with your collaborators. So, ensure they sign an agreement preventing them from using or sharing confidential information with others. That includes internal documents, plans, research, customer lists, or anything else that gives your business an advantage.
Keeping this stuff out of the wrong hands goes a long way to protecting your business.
Payment disputes and missed deadlines
Conflict awaits you if you don’t get tight on payment conditions and deadlines.
A big mistake that people make is being vague when it comes to payment and deadlines. Instead of defining objective payment conditions and dates for when things are deliverable, they say vague things like “ASAP” or “when it’s complete” without providing an objective standard. This leaves things way too open to interpretation.
And when payment and deadlines are open to interpretation like this, it sets the stage for a fight.
Difficulty changing project scope
Your needs may change during projects, and that’s normal.
What’s not normal is when project changes create disputes. That happens when there’s no clear plan for when needs change or how changes get communicated. Also, it creates problems when changes to the timeline or payment aren’t explicitly discussed.
You should be able to change the plan quickly, including payment and timeline.
Hiring freelancers and contractors lets you focus on your zone of genius.
Bringing on freelancers and contractors allows you to focus on your strengths while growing your business.
Relying on others’ time, skills, and expertise offers a fast track to scaling your business. Delegating specialized work to others means you get to focus more on being creative and being the mastermind behind your business. It’s what all successful creatives do.
We’d like you to do it while not falling into these traps. We’re here if you need more help.
